VA replacement of legacy EHR could cost as much as $16B

Agency will provide firm numbers for the Cerner procurement in its Fiscal Year 2019 budget request, says Secretary David Shulkin, MD.

The Department of Veterans Affairs needs Congress to fund VA’s IT modernization to keep its legacy systems from failing and to replace its decades-old electronic health records system.

VA officials this month announced that they plan to replace the Veterans Health Information Systems and Technology Architecture (VistA) with the same commercial off-the-shelf EHR from Cerner that the Department of Defense is currently implementing

“This will ultimately put all patient data in one shared system, enabling seamless care between VA and DoD without the manual and electronic exchange and reconciliation of data that we currently do in our separate systems,” VA Secretary David Shulkin, MD, testified on Wednesday before a Senate appropriations subcommittee.

However, Shulkin conceded that the department does not yet currently know how much Cerner’s Millennium EHR will cost to replace VistA. As a result, he said the VA did not include a funding request for a new EHR in the department’s Fiscal Year 2018 budget.

Also See: Bill puts conditions on $65M for VA to procure Cerner EHR

But, Sen. Jon Tester (D-Montana) said the VA’s procurement of a new EHR system could cost as much as $16 billion—an estimate attributed to former VA CIO Roger Baker to replace VistA. By comparison, DoD in 2015 awarded a $4.3 billion contract to a Leidos-Cerner team to modernize its EHR. He contends that the VA’s system has the potential to cost significantly more to serve its 9 million-plus beneficiaries.

While Shulkin would not comment on Tester’s $16 billion figure nor provide his own specific cost estimates, he told lawmakers that the department “will come in the FY19 budget with firm numbers so that we can have the appropriate discussion about whether this is something that you can support.”

Nonetheless, Shulkin noted that the VA’s FY18 budget includes $200 million to “start the process of change management,” adding that the majority of the cost of the commercial EHR—especially in the first two years of the procurement—is “going to be all internal change management to get ready for the installation.”

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